WA under siege by Rudd

So much so that Premier
Colin Barnett
opened his post-budget speech on Friday morning with a battle cry. “Close the shutters, man the barricades, we’re under attack," he said.

The morning after announcing the state government had balanced the books with a $290 million surplus for the current financial year and a forecast $286 million surplus for the next, Australia’s lone Liberal premier took aim at what he believes to be the biggest threat to the mineral-rich state: the federal government.

Mr Barnett said the new resource super profits tax (RSPT) had soured the reputation of Australia as a resources investment hub.

“I’m not saying it’s the sole cause, but look at the Australian dollar last night, look at the flight of capital, and look at the flight of investment. It is real and it is a worry," Mr Barnett said.

He said Western Australia was not in a position to have investment hampered. “That sharp reminder has come this week and particularly last night," Mr Barnett said.

The Australian dollar has dropped 10 per cent this month and stockmarkets around the world have recorded heavy losses as fear caused by Greece’s economic woes spreads.

The federal government has dismissed suggestions the RSPT contributed to the slide in the Australian dollar and blamed the weakness on the global financial climate.

Related Quotes

Company Profile

WA Chamber of Commerce and Industry chief executive
James Pearson
said the tax had cut mining company valuations and hit confidence in the local economy.

“At a time of renewed uncertainty in global markets it makes no sense whatsoever to penalise one of Australia’s most successful internationally competitive industries," he said.

The spat with the federal government follows the ill-fated attempt to get Western Australia to sign on to the its hospital reforms, which stalled when the Premier refused to hand over a share of the state’s GST to pay for the federal plan.

Mr Barnett viewed it as a policy of making the states dependent on the federal government for funding, to the detriment of a wealthy state such as Western Australia.

The budget papers forecast that Western Australia’s share of the national GST pool will fall from 8.1 to 7.1 per cent next year, as the resource-rich state supports the smaller states. “Western Australia is seriously being done over here," Mr Barnett said.

The Premier, who has long argued for a greater share in the GST carve-up, said that the diminishing share meant Western Australia was in effect becoming financially independent of the commonwealth.

Mr Pearson said there was real frustration in the state over federal government policies that are akin to a “tax grab" against West Australians.

“We need to find some way of making the federation work more effectively for Western Australia," Mr Pearson said. “People are upset and they are likely to take up that feeling at the ballot box."